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Russian Hackers Attacking U.S. Power Grid and Aviation, FBI Warns

Russian Hackers Attacking American Services

Russian hackers are conducting a broad assault on the U.S. electric grid, water processing plants, air transportation facilities and other targets in rolling attacks on some of the country’s most sensitive infrastructure, U.S. government officials said Thursday.

The announcement was the first official confirmation that Russian hackers have taken aim at facilities on which hundreds of millions of Americans depend for basic services. Bloomberg News reported in July that Russian hackers had breached more than a dozen power plants in seven states, an aggressive campaign that has since expanded to dozens of states, according to a person familiar with the investigation.

“Since at least March 2016, Russian government cyber actors” have targeted “government entities and multiple U.S. critical infrastructure sectors,” including those of energy, nuclear, water and aviation, according to an alertissued Thursday by the Department of Homeland Security and Federal Bureau of Investigation.

Critical manufacturing sectors and commercial facilities also have been targeted by the ongoing “multi-stage intrusion campaign by Russian government cyber actors.”

Rick Perry during a House Appropriations Subcommittee hearing in Washington on March 15.

Photographer: Andrew Harrer/Bloomberg

Cyber-attacks are “literally happening hundreds of thousands of times a day,” Energy Secretary Rick Perry told lawmakers during a hearing Thursday. “The warfare that goes on in the cyberspace is real, it’s serious, and we must lead the world.”

Separately Thursday, the U.S. sanctioned a St. Petersburg-based “troll farm,” two Russian intelligence services, a close ally of Russian President Vladimir Putin and other Russian citizens and businesses indicted by Special Counsel Robert Mueller on charges of meddling with the 2016 U.S. presidential election.

A joint analysis by the FBI and the Department of Homeland Security described the hackers as extremely sophisticated, in some cases first breaching suppliers and third-party vendors before hopping from those networks to their ultimate target. The government’s report did not say how successful the attacks were.

Read More: Russia Is Said to Be Suspect in Hacks of U.S. Power Plants

The Russian hackers “targeted small commercial facilities’ networks where they staged malware, conducted spear phishing, and gained remote access into energy sector networks,” according to the Homeland Security alert.

An industry-government partnership provided potential indicators of compromise for electric companies following Thursday’s announcement, said Scott Aaronson, vice president of security and preparedness at the utility trade group Edison Electric Institute. The federal government alerted grid operators to a threat targeting the energy and manufacturing sectors last summer, but the incident didn’t affect operations, he said.

The hackers deliberately selected targets and methodically went after initial victims as a way to reach their ultimate prizes, including industrial control systems used by power plants and other infrastructure. Their tactics included sending spear-phishing emails and embedding malicious content on informational websites to obtain security credentials they could then leverage for more information and access.

And once they obtained access, the attackers “conducted network reconnaissance,” and moved within the systems to collect information on industrial control systems.

The government’s alert on Russian cyber-attacks does not cover suspected meddling by the country in the 2016 election.

An October report by researchers at Symantec Corp., cited by the U.S. government Thursday, linked the attacks to a group of hackers it had code-named Dragonfly, and said it found evidence critical infrastructure facilities in Turkey and Switzerland also had been breached.

The Symantec researchers said an earlier wave of attacks by the same group starting in 2011 was used to gather intelligence on companies and their operational systems. The hackers then used that information for a more advanced wave of attacks targeting industrial control systems that, if disabled, leave millions without power or water.

The disclosure comes amid mounting calls from lawmakers to step up protection of the nation’s electric grid. Senator Maria Cantwell, the top Democrat on the Energy and Natural Resources Committee, pushed for a cyberthreat assessment of the grid last year, to better defend the infrastructure against potential attacks.

“I hope today’s belated response is the first step in a robust and aggressive strategy to protect our critical infrastructure,” Cantwell, a Democrat from Washington state, said in an emailed statement.

U.S. intelligence officials have long been concerned about the security of the country’s electrical grid. The recent attacks, striking almost simultaneously at multiple locations, are testing the government’s ability to coordinate an effective response among several private utilities, state and local officials, and industry regulators.

The operating systems at nuclear plants also tend to be legacy controls built decades ago and don’t have digital control systems that can be exploited by hackers.


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What Will the Nationwide School Walkouts Accomplish?

They won’t immediately prompt congressional action on gun control, but they’re vital to activists’ momentum.

High-school students release a white dove in La Crescenta, California, as part of the nationwide school walkouts on Wednesday.Kyle Grillot / Reuters
At 10 a.m. on Wednesday, students at 3,000 schools and across every U.S. time zone were in, or will be in, a state of protest. They locked arms. They formed hearts across football fields. They prepared press packets for journalists.

They were participating in a nationwide walkout—17 minutes long, to commemorate the 17 victims of the school shooting in Parkland, Florida, exactly one month ago. The protests are the latest channeling of activist momentum following the Parkland shooting—momentum that previous school shootings were not able to produce.

In some ways, Wednesday’s protests fit neatly into a long tradition of youth-driven activism around the world in the past century. The clearest historical parallel, historians who study student activism said, is probably the South African anti-apartheid movement in 1976, when thousands of black students across the country walked out of their schools; many of them were shot and killed by police. Dawson Barrett, an assistant professor of U.S. history at Del Mar college in Texas, also pointed to the 1969 Moratorium To End the War in Vietnam, a nationwide movement and teach-in, as well as Earth Day, an environmental teach-in day in 1970.

But there is something truly rare about the scale of Wednesday’s protests. Lots of other student movements, such as Black Lives Matter or the Day Without Immigrants in 2006, were more localized, and hit many key cities but didn’t resonate on the national level in the way that these walkouts have.

Wednesday’s walkout also exhibits an unusually ambivalent dynamic between schools and activists. Earth Day, as Barrett pointed out, was a relatively uncontroversial cause, so schools across the country were participating in the movement and collaborating with students. Black Lives Matter fell on the opposite end of the spectrum, with many schools not participating or supporting the protests because they were politically controversial.

This walkout falls somewhere in between. Some schools collaborated with the students on actions, moments of silence, or programming with guest speakers. But other schools have forbidden students from participating in the walk-out, with some even threatening suspension. Some superintendents cited safety concerns for these restrictions, arguing that they didn’t have enough staff to protect students from potential violence while they were outside of classrooms. But other schools explicitly objected to students’ political activism: One middle school in Fresno, California, allowed students to walk out, but strongly discouraged them from speaking about gun policy, noting that some students wanted to make a statement of solidarity rather than engage in an act of political protest.

The protesters’ decision to walk out of school is loaded with symbolic meaning, argued Ben Kirshner, a professor of educational psychology at the University of Colorado Boulder who has studied youth activism. “They’re seen in the public eye as under the care and protection of high schools, and that [implies] a more vulnerable view of students as children in need of care and protection,” he said. “So when they walk out of schools, it defies the more dominant discourses about youth or students [and identifies them] as not vulnerable, not apolitical.”

Indeed, the protesters—who were organized by activists ranging in age from 14 to 23 involved with Youth Empower, a group affiliated with the Women’s March—want political change. What does success look like for them? The end goal may be Congressional action, but as many of the protesters well know, that seems far off, particularly since the White House walked back some of its stronger gun-control proposals earlier this week.

Instead, the protests are a means of, in the organizers’ words, “sustain[ing] outrage.” That outrage started with rallies and visits to the Florida State Capitol in the days after the shooting, and it is set to continue, with a march on Washington later this month and another walkout planned for April.

The protests could end up serving another useful, quite different purpose—inspiring adults across the country to get behind the movement. The historians of activism I spoke with all pointed out that in order for a youth movement to succeed, it does still need adult support. “[Legislators] are not actually being pressured” by this display of youth activism, Barrett said. “When you look at the history of student movements among high schoolers, they have to have adult allies in order to pressure people in power, because they can’t vote and they don’t have money.”

Another effect of the walkout, whatever else it accomplishes, is that it will make a much wider group of teens and pre-teens entertain the idea of demonstrating. “I think it is noteworthy that however you feel about the issue, by May, every high-school student in the United States is going to have contemplated protesting,” Barrett said. In this way, Wednesday’s walkouts might be best interpreted as a protest that begets yet more protest.


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ICE spokesman in SF resigns and slams Trump administration officials

By Dan Simon –

LOS ANGELES, CA - OCTOBER 14: U.S. Immigration and Customs Enforcement (ICE), agents detain an immigrant on October 14, 2015 in Los Angeles, California. ICE agents said the immigrant, a legal resident with a Green Card, was a convicted criminal and member of the Alabama Street Gang in the Canoga Park area. ICE builds deportation cases against thousands of immigrants living in the United States. Green Card holders are also vulnerable to deportation if convicted of certain crimes. The number of ICE detentions and deportations from California has dropped since the state passed the Trust Act in October 2013, which set limits on California state law enforcement cooperation with federal immigration authorities. (Photo by John Moore/Getty Images)© John Moore/Getty Images LOS ANGELES, CA – OCTOBER 14: U.S. Immigration and Customs Enforcement (ICE), agents detain an immigrant on October 14, 2015 in Los Angeles, California. ICE agents…
James Schwab, a spokesman for the San Francisco Division of Immigration and Customs Enforcement, has resigned, citing what he says are falsehoods being spread by members of the Trump administration including Attorney General Jeff Sessions.

“I just couldn’t bear the burden — continuing on as a representative of the agency and charged with upholding integrity, knowing that information was false,” he told CNN on Monday.

Schwab cited Acting Director Tom Homan and Attorney General Jeff Sessions as being the purveyors of misleading and inaccurate information, following Oakland Mayor Libby Schaaf’s controversial decision to warn the community of an upcoming ICE raid.

ICE released a press release on February 27 about the operations in Northern California in which Homan stated that “864 criminal aliens and public safety threats remain at large in the community, and I have to believe that some of them were able to elude us thanks to the mayor’s irresponsible decision.”

Sessions also repeated a similar estimate in his remarks while visiting Sacramento last week.

“Those are 800 wanted criminals that are now at large in that community — 800 wanted criminals that ICE will now have to pursue with more difficulty in more dangerous situations, all because of one mayor’s irresponsible action,” Sessions had said.

Schwab said he took issue with their characterization.

“Director Homan and the Attorney General said there were 800 people at large and free to roam because of the actions of the Oakland Mayor,” he told CNN. “Personally I think her actions were misguided and not responsible. I think she could have had other options. But to blame her for 800 dangerous people out there is just false.”

“It’s a false statement because we never pick up 100% of our targets. And to say they’re a type of dangerous criminal is also misleading.”

Schwab said he brought up his concerns to ICE leadership and was told to “deflect to previous statements. Even though those previous statements did not clarify the wrong information.”

“I’ve never been in this situation in 16 almost 17 years in government where someone asked me to deflect when we absolutely knew something was awry — when the data was not correct” he said.

The Oakland mayor said in response to the former spokesman speaking out, “I commend Mr. Schwab for speaking the truth while under intense pressure to lie. Our democracy depends on public servants who act with integrity and hold transparency in the highest regard.”

Schwab also said he is a registered Democrat, but has been a loyal federal servant, regardless of which party is in power.

CNN has reached out to ICE in Washington and the Department of Justice for comment.


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Why This Bull Market Can’t Be Stopped

The bull market has lasted nine years, and investors rightly wonder how much longer it can continue. Economist and longtime market watcher Ed Yardeni is unabashedly bullish, predicting 3,100 on the S&P 500 Index (SPX), or 11.2% above the March 9 close, in an interview with Barron’s. “The earnings story is phenomenal. The tax cut has added seven percentage points to earnings growth this year,” as he told Barron’s. On trade and tariffs, he said that “the president will get a lot of pushback; then the underlying power of earnings will carry the market higher.”

Since the low point of the last bear market, reached during intraday trading on March 6, 2009, the S&P 500 has gained 318% through the close on March 9, 2018, while the Dow Jones Industrial Average (DJIA) is up by 292%. However, most analysts, including Yardeni, use closing prices to determine market peaks and troughs. On that basis, the last bear market ended three days later, on March 9, 2009. From that point onwards, the respective gains have been 312% and 287%.

Driving Forces

Yardeni sees several driving forces for further stock price gains. Given low inflation, he expects the yield on the 10-Year U.S. Treasury Note to stabilize between 3% and 3.5%, and unlikely to exceed 4%. “I’m expecting inflation will remain low because of the powerful forces of globalization, technological innovation and aging demographics,” he adds.

With nominal GDP growth at about 4.4%, he projects S&P 500 earnings to be up by 16.8% in 2018, and by another 7.1% in 2019. His forecast of 3,100 on the S&P 500 is based on anticipated 2019 earnings of $166 valued at a forward P/E ratio of 18.7. That’s above his March 9 calculation of 17.3, per his firm’s Stock Market Briefing. Nevertheless, skeptics see a variety of reasons for be bearish. Historically high stock valuations are just one of them. (For more, see also: 6 Forces That May Push the Stock Market Even Lower.)

‘The One Poll Trump Follows’

On trade, Yardeni told Barron’s, “The stock market is the one poll Trump follows. If it continues to decline, it will make him realize that [imposing tariffs] isn’t the way to proceed.” Yardeni coined the phrase “bond vigilantes” in the 1980s to describe investors who sold bonds, forcing interest rates up, in protest against federal deficit spendingper CNBC. Today, Barron’s notes, he talks about “Dow vigilantes” who send a message to Washington by dumping equities.

Nonetheless, he shrugs off the recent “trade-war scare” that sent stocks downward as “panic attack No. 61 since the beginning of the bull market in 2009.” Still, he acknowledges that trade wars are not good for economic growth, and recognizes that eventually one of these “panic attacks” will start a genuine bear market. Last week, Daniel Pinto, co-president of JPMorgan Chase & Co. (JPM

), warned that stocks may tumble by 40% in the next three years, possibly triggered, in part, by tariffs. (For more, see also: Stock Investors Should Brace for 40% Plunge: JPMorgan.)

‘Making Trade Fairer Would Be Positive’

“Assuming Trump succeeds in making trade fairer for Americans without crippling free trade overall, it would be positive for the U.S. and for stocks,” Yardeni said. He observed that “Ronald Reagan also came in as a protectionist, and imposed 100% tariffs on Japanese semiconductors and twisted their arms with auto export restraints. It worked: It brought a lot of Japanese production here.” Yardeni believes that President Trump is taking “extreme stances” on trade as a negotiating tactic, “then compromises to get more or less what he wants.”

More Bullish Signs

Fundamentals remain strong, with strong corporate earnings, growing at the fastest pace since 2011, and unemployment in the U.S. at a 17-year low, against a background of accelerating global economic growth, per The Wall Street JournalContrarians are cheered, meanwhile, by relatively “muted” optimism among investors, the Journal adds. Roughly 26% of individuals surveyed last week by the American Association of Individual Investors (AAII) think that stocks will rise in the next six months, well below the long-term average of 39%, and sharply below the 75% who were bullish in January 2000, during the Dotcom Bubble, also per the Journal.

The Bears Respond

Per MarketWatch, highly bearish indicators of excessive stock valuations include price to sales ratios as well as P/E ratios. Most bearish of all, MarketWatch says, is the high ratio of equities to total household financial assets. (For more, see also: Why The 1929 Stock Market Crash Could Happen In 2018.)

Meanwhile, despite regulatory initiatives taken in the years since 2008, a new banking and financial crisis is entirely possible. Sheila Bair, who headed the FDIC during the last crisis, is among those who warn that its lessons have been forgotten or ignored. Worse yet, she sees similar negative forces building today. (For more, see also: 4 Early Warning Signs of the Next Financial Crisis.)

For their part, Investopedia’s millions of readers worldwide are very concerned about the securities markets, as measured by the Investopedia Anxiety Index (IAI). Nonetheless, their level of worry has abated in recent weeks.

Read more: Why This Bull Market Can’t Be Stopped | Investopedia
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Vision Zero is a failure; it’s time to Stop de Kindermoord


NL Cycling
Public Domain Public Archives/ NL cycling

Vision Zero has become a meaningless response to continuing tragedy; we have to learn from the Dutch.

Vision Zero is a lovely concept; In Sweden, where it started, they believe that “Life and health can never be exchanged for other benefits within the society” – nothing matters more than human lives. It means that safety is prioritized over speed and drivers’ convenience.

In the last week, two children were killed in New York City and one in Toronto. Authorities in both cities insist that they believe in and are implementing Vision Zero. In New York, people have long been complaining about the road design where the kids were killed; in Toronto, instead of dropping a pile of Jersey barriers to slow traffic down where Duncan Xu was killed, they closed off a pedestrian walkway. In both cities, the authorities talk about the 3 E’s, Engineering, Education andEnforcement, but always manage to ignore the first, because true vision zero slows cars down and inconveniences drivers. In both cities, the mayors care more about drivers losing a minute of time than they do about dead children, or they would fix this problem.

While all this was happening, I saw a tweet that reminded me of what happened in the Netherlands in the seventies. Dutch cities, like Amsterdam, saw a huge decline in cycling, from 80 percent of the population to 20 percent between the fifties and the seventies. Meanwhile the number of people killed by cars climbed dramatically, to 3,300 deaths in 1971, including 400 children.

protest against carsStop the Child Murders Campaign/Public Domain

Being the early seventies, parents took to the streets in protest, and a grassroots campaign, Stop de Kindermoord (“stop the child murder”) took off. Renate van der Zee of the Guardian talks to organizer Maartje van Putten:

The 1970s were a great time for being angry in Holland: activism and civil disobedience were rampant. Stop de Kindermoord grew rapidly and its members held bicycle demonstrations, occupied accident blackspots, and organised special days during which streets were closed to allow children to play safely: “We put tables outside and held a huge dinner party in our street. And the funny thing was, the police were very helpful.”

Stop the murders campaingNL Cycling/Public Domain

Soon after that, a cyclists union was formed that pushed for safer bike infrastructure. Meanwhile, the oil embargo caused the energy crisis of the seventies, which gave good cover for campaigns to find alternatives to cars.

Gradually, Dutch politicians became aware of the many advantages of cycling, and their transport policies shifted – maybe the car wasn’t the mode of transport of the future after all. There was a constituency here, perhaps bigger and louder than the drivers. And years later, Dutch cities are safe for kids and for cyclists, because of grassroots activism and emotion. Instead of “vision zero” they did “stop the child murders.”

zig ziglar© Zig Ziglar Estate

Emotion is powerful; the great salesman Zig Ziglar said it was the key to motivating people. He found that “people don’t buy for logical reasons. They buy for emotional reasons.” As a tool for selling safety, Vision Zero no longer has any emotional resonance, because it no longer has any real meaning in North America. “Stop murdering our kids” does.

Slow down signsLloyd Alter/CC BY 2.0

A few years ago in Toronto, after a child was killed in a nice upper middle class neighbourhood, these signs started appearing all over the city. With typical Canadian politeness, they say “Children playing, please slow down.” This isn’t good enough anymore. It should be reprinted to say “Slow the f**k down right now and don’t murder our children.”

Instead of listening to the politicians, engineers and police and their 3Es and ten year plans that don’t inconvenience drivers, we should learn from the Dutch. We have to lose the devalued “vision zero” and simply “stop the murders.”

kindernoordDutch Archives/Public Domain

The parallels to the seventies in Europe are all there: we have our own oil and climate crisis, we have lost faith in our politicians who are pandering to car crowd. The only way we are going to get change is to do what the Dutch did: take back the streets. Forget Vision Zero, just Stop the Murders.


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New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More



The Internal Revenue Service (IRS) has (finally) announced a number of tax-related provisions for 2018, including, of course, the latest tax tables. These changes are due to the Tax Jobs and Cuts Act of 2017, signed into law by President Trump on December 22, 2017. If you’re a regular reader, you’re probably expecting me to link to the official Revenue Procedure – that’s not out just yet – but the Internal Revenue Bulletin (IRB): 2018-10 dated March 5, 2018, confirms the new numbers. Changes of note include those to the EITC, adoption credit, and more.

These are the numbers for the tax year 2018 beginning January 1, 2018. They are not the numbers and tables that you’ll use to prepare your 2017 tax returns in 2018 (you’ll find them here). You’ll use these numbers below to prepare your 2018 tax returns in 2019.

If you aren’t expecting any significant changes in 2018, you can use the updated tax tables and other tax numbers to estimate your liability. If you expect to make more money or have a change in your circumstances (i.e., get married, buy a house, start a business, have a baby), consider adjusting your withholding or tweaking your estimated tax payments. For more on the updated IRS withholding calculator, click here. For more on how to adjust your withholding using the updated form W-4, click here.

Author’s note: To view any of the charts below as full size, simply click on the title (i.e., HOH) under the image.

Tax Brackets and Tax Rates. The big news is, of course, the tax brackets and tax rates for 2018. There are still seven (7) tax rates. They are: 10%, 12%, 22%, 24%, 32%, 35% and 37% (there is also a zero rate). Here’s how those break out by filing status:









And it isn’t just the federal estate tax exemption that have been modified. Tax rates for trusts and estates have changed, too:



You can compare these numbers to the 2017 tax tables here and the original 2018 tax tables (those that IRS previously announced) here.

  • Remember to pay attention to the progressive nature of the rates when you’re making comparisons – and don’t simply multiply your income by the top rate. For more on taxable income and marginal rates, check out this quick primer.

Standard Deduction Amounts. The standard deduction amounts will increase to $12,000 for individuals, $18,000 for heads of household, and $24,000 for married couples filing jointly and surviving spouses.

  • For 2018, the additional standard deductionamount for the aged or the blind is $1,300. The additional standard deduction amount increases to $1,600 for unmarried taxpayers.
  • For 2018, the standard deduction amount for an individual who may be claimed as a dependentby another taxpayer cannot exceed the greater of $1,050 or the sum of $350 and the individual’s earned income.

There will be no personal exemption amounts for 2018.

Since there will be no personal exemption amounts, here’s your cheat sheet for figuring whether you need to file a return in 2019 for the 2018 tax year (compare to the 2017 tax year rules here).

  • For individual taxpayers, you will be required to file a tax return if your gross income for the taxable year is more than the standard deduction.
  • For married taxpayers, you will be required to file a tax return if your gross income, when combined with your spouse’s gross income, is more than the standard deduction for a joint return, provided that you and your spouse lived in the same home; your spouse does not file a separate tax return; and neither you nor your spouse is a dependent of another taxpayer who has income other than earned income in excess of $500 (indexed for inflation).

The alternative minimum tax (AMT) exemption amounts are permanently adjusted for inflation. The AMT exemption amounts will be as follows:



Kiddie Tax. The kiddie tax applies to unearned income for children under the age of 19 and college students under the age of 24. Unearned income is income from sources other than wages and salary, like dividends and interest. Taxable income attributable to net unearned income will be taxed according to the brackets applicable to trusts and estates (see above, earlier). With respect to earned income, the rules are the same as before.

For high-income taxpayers who itemize their deductions, the Pease limitations, named after former Rep. Don Pease (D-OH), previously capped or phased out certain deductions. For 2018, the Pease limitations do not apply.

Some additional tax credits and deductions were adjusted for 2018 or altered under the conference bill. Here’s a look at a few of the most popular:

  • Child Tax Credit. The child tax credit has been expanded to $2,000 per qualifying child and is refundable up to $1,400, subject to phaseouts. The bill also includes a temporary $500 nonrefundable credit for other qualifying dependents. Phaseouts, which are not indexed for inflation, will begin with adjusted gross income (AGI) of more than $400,000 for married taxpayers filing jointly and more than $200,000 for all other taxpayers. For specific dollar amounts and more about the expanded CTC, click here.
  • Earned Income Tax Credit (EITC). For 2018, the maximum EITC amount available is $6,431 for taxpayers filing jointly who have three or more qualifying children. Income phaseouts apply. For more info, IRB 2018-10 has a table providing maximum credit amounts for other categories, income thresholds, and phaseouts.
  • Adoption Credit. For 2018, the credit allowed for an adoption of a child with special needs is $13,810, and the maximum credit allowed for other adoptions is the amount of qualified adoption expenses up to $13,810. Phaseouts apply beginning with modified adjusted gross income (MAGI) in excess of $207,140 and completely phased out for taxpayers with MAGI of $247,140 or more.
  • Student Loan Interest Deduction. For 2018, the maximum amount that you can deduct for interest paid on student loans remains $2,500. Phaseouts apply for taxpayers with MAGI in excess of $65,000 ($135,000 for joint returns) and is completely phased out for taxpayers with MAGI of $80,000 or more ($165,000 or more for joint returns). The conference bill did not repeal the deduction.
  • Foreign Earned Income Exclusion. For tax year 2018, the foreign earned income exclusion is $103,900, up from $102,100 for tax year 2017.
  • Medical Savings Accounts (MSA). For 2018, a high-deductible health plan (HDHP) is one that, for participants who have self-only coverage in an MSA, has an annual deductible that is not less than $2,300 but not more than $3,450; for self-only coverage, the maximum out-of-pocket expense amount is $4,550. For 2018, HDHP means, for participants with family coverage, an annual deductible that is not less than $4,550 but not more than $6,850; for family coverage, the maximum out-of-pocket expense is $8,400.

There are significant changes to itemized deductions found on Schedule A, including:

  • Medical and Dental Expenses. The “floor” for medical and dental expenses is 7.5%. That means that you can only deduct expenses which exceed 7.5% of your AGI.
  • State and Local Taxes. Deductions for state and local sales, income, and property taxes normally deducted on a Schedule A remain in place but are limited. The amount that you are claiming for all state and local sales, income, and property taxes together may not exceed $10,000 ($5,000 for married taxpayers filing separately). Foreign real property taxes may not be deducted under this exception.
  • Home Mortgage Interest. The home mortgage interest deduction has been modified. You may only deduct interest on acquisition indebtedness – your mortgage used to buy, build or improve your home – up to $750,000 ($375,000 for married taxpayers filing separately). For mortgages taken out before December 15, 2017, the limit is $1,000,000 ($500,000 for married taxpayers filing separately). For more on mortgage interest under the new law, click here.
  • Charitable donations. The percentage limit for charitable cash donations by an individual taxpayer to public charities and certain other organizations has increased from 50% to 60%.
  • Casualty and Theft Losses. The deduction for personal casualty and theft losses is repealed except for those losses attributable to a federal disaster as declared by the President (generally, this is meant to allow some relief for victims of Hurricanes Harvey, Irma, and Maria). For more on casualty losses after a disaster, click here.
  • Job Expenses and Miscellaneous Deductions subject to 2% floor. Miscellaneous deductions which exceed 2% of your AGI have been eliminated. This includes deductions for unreimbursed employee expenses and tax preparation expenses. To be clear, it includes expenses that you incur in your job that are not reimbursed, like tools and supplies; required uniforms not suitable for ordinary wear (like those ABBA costumes); dues and subscriptions; and job search expenses. These expenses also include unreimbursed travel and mileage, as well as the home office deduction.

The shared individual responsibility payment remains in place. Taxpayers that don’t maintain health insurance coverage must claim a waiver or exemption or be subject to the penalty. For 2018, the penalty is equal to 2.5% of your AGI, or $695 per adult and $347.50 per child, up to a maximum of $2,085, whichever is higher. That amount is unchanged from 2017.

And don’t forget about those changes affecting pass-throughs and business owners who file a Schedule C. You’ll find more on that here.

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How a Stock Market Shakeup Affects Mortgages

Will the stock market shakeup affect mortgage rates and home sales? If you’ve been thinking about buying or selling a house, the recent financial headlines might be making you anxious. The Dow Jones Industrial Average, after peaking at 26,616 on Friday, Jan. 26, (Google Finance) dropped by 363 points on Tuesday, Jan. 30 – the sharpest drop since last May. The Dow lost 540 points over two days. As investors sold bonds, stock prices declined.

The Stock Market Shakeup and Home Sales

Since then the market has continued to be turbulent. In February, it registered its biggest monthly drop (4.3%) in two years. Then, President Trump’s tariffs announcement made it drop 420 points on March 1.

Investors are fearful because they don’t know whether these changes are the beginning of a serious correction or just a blip in the 8,000-point upward trend the Dow has experienced since President Trump’s November 2016 election. So how does the recent shakeup affect you if you’re thinking about buying or selling a home?

Buying in a Turbulent Market

The yield on 10-year U.S. Treasury notes has risen. When the yield on these notes increases, mortgage rates increase. On Nov. 10, 2017, the average 30-year fixed-rate mortgage charged 3.73%, according to Bankrate; by Feb. 9 the rate had climbed to 4.26% – an increase of more than 0.5% over just three months.

To put that in perspective, for every $100,000 you borrow, a 0.5% interest rate increase will cost you $28 per month ($336 per year). On a $250,000 mortgage that’s $70 per month ($840 per year).

Another factor that’s pushing mortgage rates up is that the Federal Reserve raised the federal funds rate target by 0.25% in December and is expected to continue to raise this rate over the course of 2018. Meanwhile, a lack of housing inventory has pushed home prices up.

If the recent stock market fluctuations are the precursor to a recession, layoffs could be widespread, and no one wants to be saddled with a new mortgage while they’re unemployed. Still, for the average individual pursuing home ownership as a lifestyle choice and a long-term investment, timing the market shouldn’t be the goal; making a wise, long-term decision should.

If a recession materializes,home prices could fall, perhaps making it easier to buy a home if you remain employed – and most people do. But as interest rates rise, you could find yourself facing a monthly payment similar to what you would have with higher home prices and lower interest rates. And, of course, if you’re also selling a house, the lower prices will leave you with less to spend on your new home.

Stock-market volatility underscores the importance of buying a home you can comfortably afford, one whose mortgage payments, maintenance costs, homeowner’s insurance and property taxes are well within your means. It also underscores the importance of having an emergency fund. It might be a good time to buy a home before rates increase any further, but only if you’re otherwise ready and only if you find a home you will be happy living in for years. You’re not going to care if your monthly payment is $80 cheaper if you don’t feel satisfied with your home.

Selling in a Turbulent Market

The median U.S. home price has increased by about $100,000 since January 2010, according to data from the National Association of Realtors. However, the association says we do not appear to be in a housing bubble, so there’s no need to panic and try to sell your home before prices plunge.

Home sales are often driven by factors beyond our control, such as job change, death and divorce. Choosing to sell a home when market conditions are ideal is rarely an option. Still, if you do have flexibility in when to put your home on the market, is now a good or bad time to do so, given what’s happening in the stock market and the broader economy?

If your home’s value has increased substantially since you bought it, then you should have the positive equity you need to pay off your mortgage and make a down payment on your next home. Mortgage rates are still relatively low, making it a good time to take out a home loan. Inventory is low, which could put your home in high demand but also make it hard to find a place to buy. Indeed, finding the right home to buy is the biggest challenge buyers face, according to the National Association of Realtors.

The Tax Bill Tie-In

Because the December 2017 tax bill doubled the standard deduction, fewer homeowners will itemize their deductions, including mortgage interest. The $10,000 limit on state and local income taxes (SALT) and property taxes also makes it less likely that homeowners will itemize and get a tax break for these homeownership costs.

In addition, new homeowners will only be able to deduct mortgage interest on a maximum of $750,000 rather than $1 million in mortgage debt as they can now. This change, however, won’t affect all that many home buyers.

Cumulatively, the tax bill changes could affect home prices, especially in states most affected by the SALT provision. Homeownership could become more expensive without the tax deductions, decreasing demand. However, the higher standard deduction, across-the-board tax rate cuts and the expanded child tax credit could put more money in home buyers’ pockets, offsetting this change. The National Association of Realtors predicts that existing home sales volume and prices will moderate in 2018 because of the tax law. (For more, see How the GOP Tax Bill Affects You.)

The Bottom Line

Buying or a selling a home is a slow and expensive process with long-term implications for your lifestyle and finances. Short-term stock market shakeups should not be a factor in home buying or selling decisions. Your personal circumstances – including your personal finances – should be the biggest driver of your real estate decisions. (For more, see Playing Hardball When Selling Your Home.)

Read more: How a Stock Market Shakeup Affects Mortgages | Investopedia
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